Good afternoon, everyone, and thanks for coming out. My name is John Glass, I'm the restaurant analyst. And it's my pleasure to introduce our next presenting company, Starbucks. Since 2009, Starbucks has been on a run the likes of which I don't think any of us had seen in retail or restaurant history. I think even exceeding the run that McDonald's had several years before when it underwent its transformative initiatives.

Sales and margins at Starbucks are now well above pre-recessionary levels, but not ones the rest than their considerable successes. Starbucks has announced in the last 6 months the entry into the lucrative single-serve coffee business, as well as expanding its core coffee business into a lighter roast in an effort to capture more customers and just last week, the entrance into the juice market.

In our review, this remains one of the most compelling stories within all of retail. Joining us today from Starbucks is the company's Chief Financial Officer, Troy Alstead. He's a one-time veteran. As well as Mary Egan, who's the Senior Vice President of Strategy; and JoAnn DeGrande who runs Investor Relations.

Before I turn it over to Troy, just a quick program note. Now directly following this session is going to be an equity strategy panel, but along with our -- some of our consumer staple panels. Please join us for that. That means that the breakout session is going to be at 3:00 for Starbucks and join us down the hall at 3:00 but not directly after that. So with that, Troy, let me turn the podium over to you. Thanks for coming.

Troy Alstead

Okay. Thank you, John. Hello, everybody. Thanks for coming today. It's -- I appreciate the chance to be here and to see all of you. Ten years ago, 5 years ago, even, Starbucks was a rapid growth company. A company that since its days as the early days of the IPO back in 1992 had very successfully and profitably executed an increasing exhilaration of a growth trajectory around the world.

And that was characterized almost singularly during that whole span of time as growth in new stores.

Footprint growth. First is we expanded rapidly store count around the U.S., market-to-market and then to 50-plus countries around the world during that span of time. Starbucks today is again a growth company. But a growth company today that is far more diverse in terms of the growth platform than we ever have been before.

Not solely reliant on just growth in stores any longer. Now the ability to grow the portfolio of stores to expand our footprint with more depth in the U.S. and around the world is still a very significant part of the growth platform. But we have every opportunity now to grow in more dimensions than ever before.

Including, very significantly, a deep focus on growing volumes and profitability in the existing portfolio of stores through efforts around focused innovation on day part expansion. Food and beverage is targeted at stretching that consumer experience from what it still a very morning oriented part of our business to more broadly reaching consumer all throughout the day, opportunities to drive both with lean principles in stores and technology in store to expand our ability at peak hours in the mornings to drive more volumes. So heavy focus on driving growth more cautiously and more focused than ever before within the confines of 4 walls of the store.

Also very significantly, the company is no longer satisfied to be the #1 player in the coffee house Super-Premium environment and I think there was a period of time in our history where while we did some of the things outside of the 4 walls of the store, that was most significantly our efforts, that's how we defined ourselves, that's how people defined us. I think we were satisfied with that.

What we've recognized in a real re-strategic look in the last couple of years is that there is a significant amount of consumption and customer experiences that we can get outside of the 4 walls of the store. As we've become more than just a premium coffee house purveyor, but now are a truly a global consumer brand that has a chance to reach customers in lots of points of their life and in many places and in any form factors that they consume coffee. So our CPG Foodservice business has become a more significant part of our future than it ever has been a part of our past and that's defined much of the actions of the past year as we've recognized with this opportunity that we have a chance to more meaningfully leverage the assets we have in our stores and in the 60 million customers who come to the stores every week into experiences and intercepting them in other parts of their daily lives also.

And then increasingly as well, we have an opportunity to drive growth through other brands. Some of those being organic brands, such as Frappuccino in store where we started out as a blended beverage in our store many years ago, but is now a very significant proposition in bottled form outside of our store. Organic brands such as VIA, a brand that Starbucks created a couple of years ago has grown to, just this past year, a $250 million customer sales business and it's really its second full year meaningfully and still growing rapidly.

But as an also acquired brand such as Tazo, a small tea company we bought back in the 90s, it's now a $1 billion brand for the company. Seattle's Best Coffee, a company we bought 8 or 9 years ago that allows us to go after a bigger share of consumption than we will get just with the premium -- Super-Premium Starbucks brand that gives us access to a different place of consumptions, a different price-sensitive consumer, a different aspect to that brand that deepens our reach into coffee consumption.

And then as recently as last week with Evolution Fresh, which we'll talk a little bit more about here shortly, also a chance through an acquired brand to add to the portfolio that's consistent with Starbucks and very much about what we are but helps us define another leg of growth in our future.

Now 2008 and 2009 were years that were characterized for the company as our restructuring and transformation. We did a significant amount of work about restructuring the business, pulling cost out of our G&A infrastructure, becoming far better operators within the 4 walls of our store, managing the middle to P&L better than we ever have before. Changing the whole consumer experience, going back to many of the elements that define the brand in the early days around that Super-Premium in-store experience every time that we interact with a consumer.

2010 then, following on that restructuring effort, became the year of really the financial breakthrough. We went from a shrinking top line during 2008 and '09 to the growing the top line once again in 2010. And meaningfully growing margins in the bottom line too while we reach record financial year in 2010 stronger on all aspects than we ever had prior to the downturn in '08.

2011 then built upon all of that. Where we once again stretched the top line and the bottom line to new records for the company to places we've never been before through our both top line growth and significant margin improvement in the P&L despite a number of headwinds that were there. It was also a year, though, that we laid the foundation for everything for much what is to come. Significant effort around bringing our packaged coffee business in-house to number one, shore up that business meaningfully but position us and give us a platform to layer on to it as we grow in the years ahead.

Tremendous amount of work around driving VIA around opening stores, around expanding around the world. Deepening foundational efforts to position the company not just for continued success in '11 and '12 but setting us up for 2013 and 2014 and beyond.

Many of you here were at our investor conference in New York back in fall of 2008. Now that was about early December 2008. That was about the low point for Starbucks at that point in time. Not quite, but very close to that trough in our top line and in our profitability and really the point in time where we were most acutely focused on the restructuring that we then underwent over the course of that year and the following year.

At that point in time, one of the slides that we presented to you then was a slide that shows consumer confidence and how that had trended for the year or 2 prior to that point in time. And then we laid up against that the curve in Starbucks same-store sales growth and correlated against it and they were not -- for us, not surprisingly, the exact same line. Every bump, every trough, every little rise in consumer confidence during that span of time, the exact same thing happened with Starbucks same-store sales.

And the very significant dive that consumer confidence took during that span of time our same-store sales also took that very same parallel dive concurrently. Now one of the things we told ourselves internally in that span in time is that we were going to disconnect those 2 lines. We were going to undertake things over the next year or 2 or 3 that we create a wedge between the volatility that may happen in the consumer environment externally and what we can deliver to the customer that will drive our business internally. And much of what we have done over the past 2 years has been defined by that effort to disconnect those 2 lines.

Focused on quality of beverage and store around relevant consumer innovation, around the experience of stores, around the cleanliness, the retraining of our partners, all of which were about creating reasons for the consumer to come despite what might be happening in the broader macro environment.

And I think this chart, and what we were able to do particularly in 2011, and what is still a fractured consumer environment, I would say, is testimony to the fact that we've been creating that wedge and continue to do that and have entered the current fiscal year with the tremendous amount of momentum as a result to that.

Now it is largely on the strength of that same-store sales growth that we've been able to drive the kind of overall financial results we have in the last 2 years. And in particular, in 2011, the year we just ended 1.5 months ago, $11.7 billion in total company revenues; 14.5%, approaching 15% operating margins for the total company as we have driven margin and focus on the P&L, both through leverage and the top line growth, but also very meaningfully as we continue to focus around cost in store, around the efficiencies of labor, around procurement activities, around supply chain, everything we can do to more aggressively than ever before drive efficiencies throughout our business, while improving the customer experience and driving top line growth has contributed to our margin improvement.

And I have point out that this margin improvement we saw in 2011 was despite the fact that we faced about 220 basis points of commodity headwinds during the year and despite that significant pressure that we faced, we were still able to drive kind of margin improvement as a total company that we saw.

As a result to that top line growth, as a result of everything we've done in the middle of the P&L, we are able to drive earnings per share to $1.62 for the year. And that includes about a $0.10 of some nonroutine gains in the quarter. But a $1.52 by itself is 24% growth over the comparable earnings per share in the previous year. It's a very healthy growth and that again is with about $0.20 of commodities pressure, which is largely coffee in our case in the year. So 11% revenue growth, 24% earnings growth. But obviously, much, much more significant core earnings growth generated in the business, absent the big pressures that we felt from commodities during the year.

Now in addition to restructure, focus on growth, focus on the middle of P&L, we've become acutely focused on deployment of capital. One of the issues we face as a company in '06, '07 and '08 was capital that deployed into stores that weren't returning what they needed to be. As we came to the span of time, we have reenergized our own efforts internally around the evaluation analysis about capital deployment. Measurement of it, challenging ourselves to what the business in the assets should be able to return and how we deploy that much effectively and putting in place in the company disciplines and rigor that we've never had historically around driving return on capital in the business while growing the business. The result has been that we've set ourselves a target to get to 20% over a few years. We reach that about a year before we thought we would be able to in 2011. And we believe we have, in our pathway not too far ahead of us now the ability to get to the mid 20s as we continue to focus on driving growth in the business and particularly less capital-intensive growth as we diversified that growth trajectory from historically being heavily bricks-and-mortar to now still relying on that but much more meaningfully drawing growth from other more diversified opportunities.

Now as we have driven the P&L, we have invested for the future in a number of ways across the business. Geographies, such as China and Brazil, which are our most rapidly growing geographies around the world right now represent huge opportunities for us in the future. And while neither contribute significantly to the business today, this is about setting us up for 2 years now and 5 years from now and 7 years from now, as we've invested against infrastructure and talent and capability in systems in these markets to drive growth in the future. Brands such as Seattle's Best Coffee relaunching at this past year while still small and not meaningful to the P&L in a way that we believe that gives us a chance to drive to a bigger business in the years ahead.

Remodeled as we are touching with renovations and remodels in our stores more than we ever have in our history before. About number one, focus on maintaining the asset that we have and preserving that customer experience and the cash that we get from those stores. But also, in a smaller set of the stores, much more meaningful remodels that have clearly driven the top line and the bottom line very significantly when we've executed against those.

And then investment such as the acquisition we announced last week, a small acquisition with Evolution Fresh, we'll talk more about it in a moment, but very much positioning us in store and outside of the Starbucks store tremendous opportunities we believe in years ahead.

And we've made those investments while increasing our cash return to investors, both in the form of dividend, growing and a disciplined valuation-based share repurchase program.

Now our U.S. business has been and continues to be the engine of growth and profitability in our company. It's far and away the biggest segment, it's the oldest part of our business. And with the recovery of the U.S. business has come the ability to drive investment opportunities in these other businesses we have around world. $8 billion in revenue in the past year, 19.4% operating margin as a segment. And that's the 4 wall margin of the business after its own G&A. So that's a true operating margin after fully loaded with SG&A in that business. We believe there's room to continue to drive that growth in that U.S. business, as well as the profitability of the margin structure -- higher in that business over time. And that is also with about 160 basis points of commodity pressure year-over-year between 2010 and 2011. So a robust driving of profitability to that business and overcoming what have been a very significant headwinds that we have faced.

The first 10 years or so of Starbucks International history starting in about the mid-90s through the mid-2000 was really characterized by rapid growth to lots of places around the world. We went from 0 countries in 1995 to the 1 country in 1996 outside of North America, to 50-plus countries by the time that we got to 2005 or 2006. And during that time, the business quickly moved into profitability but then languished in the mid-single-digit operating margins for a span of time and didn't have a trajectory to lift beyond that. Three years ago, that's when we really began to transform the U.S. business. We began to, on a slower scale, apply much of the same learnings and disciplines and rigor to what we did outside of the U.S.

Believing that over time, we had a path to move international as a segment to the mid- to the upper-teens operating margin, while growing the business significantly. We've been able to navigate that path about a year ahead of schedule getting in to the low teens. Now we believe sustainably as of 2011, and I would expect that we'll have continued margin improvement internationally for a number of years ahead moving that business systemically toward the mid to upper teens. This is a good point for me to point out here now that we have, just as of the beginning of October, restructured how we manage our global business, our store business from what used to be a U.S. business and everything else to now a 3-region structure that allows us to put a much stronger leadership teams against more rational geographies around the world.

So our new segment structure from the U.S. to international now becomes the Americas with 1 President and 1 team against that structure. China, Asia Pacific as 1 geographic region. And then Europe, Middle East and Africa, again, more consistent, more cohesive geographies that allows the bigger people against more sized businesses. We'll begin reporting under that new structure when we get to our first quarter earnings release, which will come later towards the end of January.

What I'll point out, though, is that even as we move the overall International business under the old structure into that mid upper teens, it'll be a tiered structure around the world where we currently have the Americas, for example, with an operating margin right around 20% which is heavily driven by the U.S. as you can imagine. China, Asia Pacific that has an operating margin of about 30% today and a very healthy margin structure in that business. And then Europe, Middle East, Africa, which is the mid-single digits today, clearly are more challenged part of the world for us, profitable but nowhere near where it needs to be. But With the pathway in the EMEA moving that business toward over a multitude of years, towards the mid-teens, which is at where we can see ourselves getting as we apply the learnings and the disciplines in the restructuring work that we've done so successfully in the U.S. And now very acutely into the U.K. and Continental Europe, we're confident in that path ahead over a number of years ahead of us.

And then as we have grown our retail business around the world and improve the profitability of that, again, we've also recognized the tremendous opportunity we have on our consumer products business. It's a business that on the top line is smaller today than other businesses but is a highly profitable business that roughly around 30% operating margin and we believe will represent the most significant part of our growth equation in the handful of years ahead of us is as we meaningfully drive business and pursue business leveraging outside of our Starbucks store.

This is also the business that is most significantly impacted by coffee cost because coffee is just a much bigger chunk of the P&L here. There's about 830 basis points of coffee pressure in the current year we just ended, 2011. So you can see that whole margin decline was actually really driven by that change year-over-year in commodity prices.

Now the momentum we have built in 2010 and then completed just recently in 2011, we are on well on pace to continue that as we move in 2012. Continue to drive double-digit top line growth, contributed by mid-single-digit same-store sales growth and driving margin improvement in our expectation of 50 to 100 basis points of margin improvement and 15% to 20% EPS growth in the year ahead, and the pressures from commodities in '12, given that we fully locked our coffee pricing for this year, are about equivalent to what they were in 2011. So we have embedded within these targets there's about another $0.21 EPS of headwinds from coffee.

The commodity cost pressures, as I mentioned, 2 years in a row, about $0.41 over that 2 years span of time. Despite that pressure, we've been able to drive 24% comparable EPS growth in 2011. We're targeting 15% to 20% EPS growth in 2012, again, despite that. And the good news on the horizon for us is, is that we are currently locked about 1/3 of our coffee prices, coffee costs for 2013. We will continue to opportunistically buy as we believe the market's in the right place for that. Every indication now is that we will get some benefit from commodities as we move into 2013. It's a bit too early to do the algebra, but it's encouraging and what we've locked so far is lower than the average price for 2012.

We have 17,000 stores in 50-plus countries around the world as a company. And while that is the single largest footprint of anybody in the premium sector of specialty coffee, we're at scale nowhere. At best, there are a handful of cities around the world, including in the U.S., where we might be approaching some maturation in depth of the concept. But even in the U.S., where we are largest and we've been the longest, we are discovering significant opportunities to drive additional square footage growth. One of the things we learned 2 and 3 years ago as we went through the restructuring, and closed about 10% of our U.S. portfolio that were mistaken real estate to a large degree is how much opportunity there is to open good sites and some of those same trade areas in the U.S.

Sometimes with alternative store formats with more thoughtful placement of drive-throughs, depth of penetration in existing markets, much of our workaround infrastructure has enabled us to go to some remote markets more profitably than we ever could have in our history. Tremendous opportunities to keep adding depths in the U.S. and whitespace, to a large degree, outside of U.S. where there's not a single market outside of the U.S. over anywhere near the depth of penetration that we know we can achieve over time.

Our store growth will be predominantly toward those parts of the world where we have the best economics right now. So the Americas, very strong year in economics, very healthy profitability, about 400 net new stores coming in the next year. China, Asia Pacific, about 300 net new stores, very strong, robust, healthy store model. We would open more new stores there. It's only a capability driven issue for us today. So as we're rapidly investing in infrastructure, systems, people, supply-chain capabilities, we'll ramp up that China, Asia Pacific growth rate in the years to come.

And then Europe, Middle East, Africa, a much more moderate growth pace as we work to fix the model, drive increased profitability, be more selective on real estate to get profitable scale as we grow in that part of the world.

Our established markets while we're in 50-plus around the world, that really is a handful of countries that are most meaningful to us today and that will be most meaningful to the company 10 years from now. Canada and Japan, are our most mature markets outside of the U.S. and yet tremendous growth opportunity still to come. Healthy models in both of those places, opportunities increasingly to drive more thoughtful growth and penetration both in store count overtime but also outside of the store in consumer products channel.

Transforming our key European markets, the U.K., France, Germany, much of that effort is about applying the learnings from the U.S., both P&L management, capital deployment, but also everything we've done in the U.S. to reengage the consumer more meaningfully in the proposition is opportunity for us in Europe as well.

And then in our existing market, our emerging markets, the whole focus is about deepening our [ph] capabilities to go faster, to harvest and go after what is a tremendous opportunity given the size and the opportunity we see in those places around the world.

We will renovate or remodel to some degree or another, 1,700 stores in the coming year just in the U.S. alone. Much of that is the normal maintenance cycle that we go through in the portfolio of our size where we'll refresh, in some cases, minor remodels around painting and configuring some new furniture. In other cases, much more substantial kinds of remodels that you see on some of the examples here. For the most part, those remodels are geared toward maintaining that asset, maintaining the customer experience, preserving the cash flow from those stores. In some cases, where we do major remodels, what we have clearly learned in the last year or 2 is we have significant opportunities to drive the top line, to drive the bottom line on these kinds of major renovations and to get a very healthy return on that invested incremental capital from the renovation. So we will more selectively in a little bit more quantity than we have in the past do these kinds of targeted remodels, which go a bit beyond even the normal maintenance CapEx cycle.

We entered the premium single serve, premium single-cup market about 2 years ago with the introduction of Starbucks VIA. As of the end of fiscal 2011, that was a $250 million system sales business on its way toward what we are quite confident now over a number of years will grow to be $1 billion opportunity for us. We, just last week, launched our second foray into premium single-cup in partnership with the Green Mountain. As Starbucks K-Cups shipped as of November 1, we've actually shipped 30 million K-Cups on the first day and we expect to ship 50 million of them in the month of November alone. On the way that what we are quite confident will be a very healthy business in K-Cups with Starbucks over the course of the next year or 2.

This business is going so well for us that we will stage our launch between a food, drug, mass. Specialty retail channels first and allocate all cups against those channels. And we won't launch in Starbucks stores until about a year from now, simply given the capacity constraint of producing the cups given the projections that we have in the business. It's the space that we're very excited about. It's rapidly growing. There's more we'll do here. We said when we launched VIA that we never intended to be in only 1 form of single-serve that it would be multiple. And now that we're in 2, we have no intention of stopping here. We're spending tremendously against innovation, both against what the U.S. market will evolve to over time, and around the world and getting ahead of where that consumer is at in understanding what is the next form factor to come and how can Starbucks most meaningfully play in that space and in fact, drive the consumer into that -- recognizing that trend.

We have always had the benefit of a very passionate, highly engaged loyal customer base. One of the things we've been able to do with our card and loyalty programs meaningfully over the last year is to engage even more deeply than we ever have on our history. $2.4 billion in dollars loaded onto the Starbucks Cards in 2011. Millions of customers in our new loyalty program, which launched just about a year or 2 ago, and 2 million of those that have reached gold level already. That program is largely in the U.S. and only in recent months has began expanding outside of the U.S.

There's no question that loyalty and the cards for us has been a significant contributor to our overall health of our business in the U.S. and driving same-store sales and traffic growth in the U.S. over the past year. And we're quite confident that as we meaningfully drive that outside of the U.S., we have ever opportunity to engage the consumer deeply into loyalty program create that sticky transactions as we have here and have that the 1 piece of our growth equation outside of the U.S.

We have also then built on the brand engagement, the emotional attachment that people have to Starbucks digitally. And have had tremendous success building our brand in a very authentic, relevant ways through the digital channels. And what we have found is that this resonates very significantly with the Starbucks consumer and allows us to leverage our advertising spend far more meaningfully. Starbucks has never been a big advertiser. We don't intend to become a big advertiser. We don't need to with the kind of consumer engagement we have and now the ability to very authentically and genuinely drive and deepen that engagement through programs like cards for in-store experience and increasingly through the digital channels.

Now with that, I'm going to introduce Mary Egan. John, I think, introduced her up front. She is the Senior Vice President of Global Strategy and Corporate Development. She's going to talk a little bit about one of the next things coming for us. Mary?

Mary Egan

Good afternoon. I'm going to talk a little bit about Evolution Fresh, a company that we acquired last week. It was a very small deal in dollar terms, but a very important deal for us in terms of our strategy going forward. And I'm just going to spend a few minutes talking about that strategy and talking about Evolution.

So the investment thesis of Evolution really goes back to the story of Starbucks. When Starbucks first came on the national scene, people weren't sitting around saying, "My coffee is bad." They thought their coffee was fine. And then here came Starbucks and we showed people something better. And we brought to the market a coffee that was superior technically. We had Arabica beans in our coffee. Commonly, people are drinking Robusta beans at the time. The roast profile of our coffee, the theater and romance, and the way the elevated coffee and told the story of our coffee in our stores was all new and different. And as a result of that, we de-commoditized the coffee category.

With Evolution, we're looking to do the same in juice. Evolution juice is a technically superior product. I'll come back to that in a minute. And what Starbucks is bringing to this partnership is an opportunity to really tell that story and bring that narrative forward to the consumer. Something we know how to do better than anyone.

The other piece of this that leverages Starbucks' core competencies and our competitive advantages is what we call our blueprint for growth. So our coffee cannot only be found in our stores, but for many years, as Troy mentioned, in CPG and in Foodservice channels. We are going to be using that same blueprint for growing the Evolution brand. You will see it showing up in our stores, where we can engage between our partners and our customers one-to-one and really tell the story of what is Evolution Juice, why is it different, why is it fantastic juice. How people understand all the occasions for which they can be using this juice in their lives. And then when that juice shows up in CPG, it's not just a product on a shelf, it's a product with emotional content. It's a product with a story and a connection that people started to hear when they were customers in Starbucks.

Combine that with our presence in social media where we have 38 million fans on Facebook and one of the highest, not just fan basis but engagement levels with our customers and we have an incredible synergy across our assets, our social media assets, our CPG and Foodservice account assets and our retail stores and our brand story telling capabilities to really take Evolution from what it is today, which is a small pretty local brand on the West Coast of the United States and create something that is national and ultimately potentially a global brand.

Just to give you a little sense of why I say the juice is superior. A lot of premium juice today actually has a lot of flavors added that may not be made with fresh fruits and vegetables in the production facility. Evolution Juice has nothing added. It is -- the only thing you'll see in the production facility is fruits and vegetables. It's a true juicery. And one of the important points here is high pressure pasteurization. A lot of the juices on the market today, in order to get long shelf life and create safety for consumers are pasteurized using heat. Heat does a couple of things. Notably, it changes the taste of juice. It changes the shelf life and makes it quite long-lasting but also takes away some of the nutritional value. High-pressure pressurization -- Evolution is the largest juice company in the U.S. with high-pressure pasteurization system already installed. Over 50% of their juice sales today are already treated with high-pressure pasteurization methodology. And this allows us to bring to market a juice product for consumers that has all the characteristics of a fresh juice with the shelf life and safety of something that is pasteurized and something that we're really excited about.

So we think that once we're able to really tell the story and bring it forward to our consumers, we're going to see a lot of differentiation and de-commoditization in the juice category the same way that we saw in coffee.

The other thing I'll add is we're not just looking at this as fruit juice. One of the big pieces of the puzzle for us is green juices and vegetable juices. If you look at consumer insight today, obviously, health and wellness is a huge unmet need in America. We all know that, that's not news. Actually, vegetables are much bigger on that need than fruit. So people can obviously grab an apple, grab an orange, grab a banana and throw it in their bag. That's not that hard. It's hard to get your vegetables in a day. You've got to get a salad, buy some vegetables, wash them, cook them, it's complicated. The green juices that are sold at Evolution today, there's 2 pounds of vegetables in 1 15-ounce juice, phenomenal nutritional value, great taste, really fresh, nothing added and there's only 70 calories per serving, 2 servings in the bottle. We think that's going to be a phenomenal growth engine. And we see a lot of cues around the marketplace where green juices are selling tremendously these small-scale, authentic juiceries that are selling green juices as their #1 skew [ph].

And the other thing I'll just mention is we alluded in our announcement last week the fact that we are planning some health and wellness retail stores. We're not going to say a lot about that today. But I will share with you that some of what we see in the marketplace are stores with $2 million and $3 million average unit volume, they're in this fresh juice business. So we think this is a microtrend today that's going to become a macrotrend and something that is very synergistic with our capabilities and our value.

The last thing I'll just say is that Evolution is not a deal that's just about juice. This is a deal about health and wellness. Health and wellness is a new platform for Starbucks. As we look at acquisitions, we're looking at them very much with a health and wellness blend. And over the past several years, we've done a number of things to bring more health and wellness into offerings we have for our customers. And we're going to continue in that vein. So this is just the beginning.

I mentioned our blueprint for growth, and Troy talked about this as well. But I just want to end by highlighting this. It's a really important piece of our strategy. We have CPG and Foodservice distribution throughout the United States. Very strong in some international markets and we are building another. So this will be a global opportunity in the future. We also have, obviously, 17,000 retail stores around the world. And we have an emotional engagement that is second to none. There's a lot of brands that have a lot of retail stores, and there's a lot of brands that have CPG and Foodservice present. And there are some brands that have an emotional engagement where the customers feel attached and feel an affinity to the brand. But there's no brand that I know of that has all 3. And when you turn on all 3 of those channels and you start to really realize the synergies of what Starbucks can do, you see the power of our future growth potential. This is how we launched VIA. We leveraged all 3 of these channels. It's been a tremendous success. And this is what we're going to be using going forward to Evolution and other new brands that we're bringing forward.

Troy Alstead

I think that's it. I would just say that Holiday launched today, as a matter of fact, in Starbucks, if you haven't been to Starbucks store yet today, there's still time. I encourage you to do that to do your shopping early. And with that, John, are we out of time?

John S. Glass - Morgan Stanley, Research Division

We are in time. Thank you. Well-timed. Please join us again after the break out at 3:00 and stay tuned now for equity strategy panel. Thank you.

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